Works contract on civil contract

Others 512 views 2 replies

Balasubramani

Senior executive

90 Points Joined January 2011

Dear Sir,

Mr. X is Land owner, Mr. Y is Developer,

Both are entered in JV for develop the land.

Mr Y and Mr. Z (Purchaser) Entered into works agreement

Mr y and Mr.Z Entered into civil works contract, Total value of work contract 23 Lakhs, Out of which 8 Lakhs included land, Mr. Z Not register the works contract, The purchase and developer UDL is registered.

Now i want to go Composite Method, Developer not manitain any books How Much I pay the VAT in Tamil Nadu,

Please help to guide me

Replies (2)

Guest

Greetings Balasubramani,

As the developer has not maintained any books, the composite rate on this civil works works contract will be 2% of 23 lakhs. In my opinion it is irrelevant at this point if Mr. Z is not a registered person because of section 6.

As per section 6 of the Tamil Nadu VAT Act, Mr. Y has to meet his VAT obligation out of the margins earned from contract with Mr. Z only i.e. Mr. Y cannot recover the same from any one and as you may know no input tax credit will be allowed.

Kind regards.